ACCT/505 ACCT505 ACCT 505 Week 8 Final Exam
- Devry University / ACCT 505
- 22 Jun 2018
- Price: $8
- Other / Other
ACCT 505 Week 8 Final Exam
Question
1
20 / 25
pts
(CO F)
The following overhead data are for a department of a large company.
|
|
Actual Costs Incurred |
Static
Budget |
|
Activity
level (in units) |
500 |
450 |
|
|
|
|
|
Variable
costs: |
|
|
|
Indirect materials |
$5,950 |
$5,382 |
|
Electricity |
$1,112 |
$1,008 |
|
Fixed
costs: |
|
|
|
Administration |
$2,770 |
$2,800 |
|
Rent |
$5,120 |
$5,100 |
Required: Construct a flexible budget performance report that would be useful
in assessing how well costs were controlled in this department.
Question
2
25 / 25
pts
(CO H)
Mr. Earl Pearl, accountant for Margie Knall, Inc. has prepared the following
product-line income data.
|
|
Product |
|||
|
|
Total |
A |
B |
C |
|
Sales |
$100,000 |
$50,000 |
$20,000 |
$30,000 |
|
Variable
expenses |
60,000 |
30,000 |
10,000 |
20,000 |
|
Contribution
margin |
40,000 |
20,000 |
10,000 |
10,000 |
|
Fixed
expenses: |
|
|
|
|
|
Rent |
5,000 |
2,500 |
1,000 |
1,500 |
|
Depreciation |
6,000 |
3,000 |
1,200 |
1,800 |
|
Utilities |
4,000 |
2,000 |
500 |
1,500 |
|
Supervisors’
salaries |
5,000 |
1,500 |
500 |
3,000 |
|
Maintenance |
3,000 |
1,500 |
600 |
900 |
|
Administrative
expenses |
10,000 |
3,000 |
2,000 |
5,000 |
|
Total
fixed expenses |
33,000 |
13,500 |
5,800 |
13,700 |
|
Net
operating income |
$7,000 |
$6,500 |
$4,200 |
($3,700) |
The
additional information below is available.
- The factory rent of $1,500
assigned to Product C is avoidable if the product is dropped.
- The company's total
depreciation would not be affected by dropping Product C.
- Eliminating Product C will
reduce the total monthly utility bill from $4,000 to $3,000.
- All supervisory salaries for
Product C would be avoidable.
- If Product C is discontinued,
the maintenance department will be able to reduce total monthly expenses
from $3,000 to $2,200.
- Elimination of Product C
will make it possible to cut two persons from the administrative staff.
Currently, their combined salaries total $2,500.
Required:
Prepare an analysis showing whether Product C should be eliminated. Provide
numerical support for your findings.
Question
3
30 / 30
pts
(CO D)
Topple Company produces a single product. Operating data for the company and
its absorption costing income statement for the last year are presented below.
|
Units
in beginning inventory |
$2,000 |
|
Units
produced |
9,000 |
|
Units
sold |
10,000 |
|
Sales |
$100,000 |
|
Less
cost of goods sold: |
|
|
Beginning
inventory |
12,000 |
|
Add
cost of goods manufactured |
54,000 |
|
Goods
available for sale |
66,000 |
|
Less
ending inventory |
6,000 |
|
Cost of
goods sold |
60,000 |
|
Gross
margin |
40,000 |
|
Less
selling and admin. expenses |
28,000 |
|
Net
operating income |
$12,000 |
Variable manufacturing costs are $4 per unit. Fixed manufacturing overhead
totals $18,000 for the year. The fixed manufacturing overhead was applied at a
rate of $2 per unit. Variable selling and administrative expenses were $1 per
unit sold.
Required: Prepare a new income statement for the year using variable costing.
Comment on the differences between the absorption costing and the variable
costing income statements.
IncorrectQuestion 4
0 / 10 pts
( CO E) Installing a custom logo on a boat is a(n)
· batch-level activity.
· product-level activity.
· unit-level activity.
· organization sustaining activity
·
Question 5
·
10 / 10 pts
·
(CO G) Given the following data, what would ROI
be?
·
·
Sales $70,000
·
Net operating income $10,000
·
Contribution margin $20,000
·
Average operating assets $50,000
·
Stockholder's equity $25,000
·
·
28.6%
·
·
20.0%
·
·
40.0%
·
· 50.0%
·
Question
6
·
30 / 30
pts
·
(CO I)
(Ignore income taxes in this problem.) Axillar Beauty Products Corporation is
considering the production of a new conditioning shampoo that will require the
purchase of new mixing machinery. The machinery will cost $375,000, is expected
to have a useful life of 10 years, and is expected to have a salvage value of
$50,000 at the end of 10 years. The machinery will also need a $35,000 overhaul
at the end of Year 6. A $40,000 increase in working capital will be needed for
this investment project. The working capital will be released at the end of the
10 years. The new shampoo is expected to generate net cash inflows of $85,000
per year for each of the 10 years. Axillar's discount rate is 16%.
Required:
What is the net present value of this investment opportunity?
Based on your answer to (a) above, should Axillar go ahead with the new
conditioning shampoo?
·
Question
7
·
25 / 25
pts
·
(CO C)
Longiotti Corporation produces and sells a single product. Data concerning that
product appear below.
|
Selling
price per unit |
$375.00 |
|
Variable
expense per unit |
$144.00 |
|
Fixed
expense per month |
$1,686,300 |
·
Required:
Determine the monthly breakeven in units or dollar sales. Show your work!
·
Question
8
·
25 / 25
pts
·
(CO B)
Buckhorn Corporation bases its predetermined overhead rate on the estimated
machine hours for the upcoming year. Data for the upcoming year appear below.
|
Estimated
machine hours |
37,000 |
|
Estimated
variable manufacturing overhead |
$7.77
per machine hour |
|
Estimated
total fixed manufacturing overhead |
$888,000 |
·
The actual machine hours for the year turned out to be 35,000.
Required: Compute the company's predetermined overhead rate.
·
Question
9
·
25 / 25
pts
·
(CO B)
Carter Corporation uses the weighted-average method in its process costing
system. Data concerning the first processing department for the most recent
month are listed below.
Work in process, beginning:
|
Units
in beginning work-in-process inventory |
600 |
|
Materials
costs |
$6,900 |
|
Conversion
costs |
$2,500 |
|
Percentage
complete for materials |
80% |
|
Percentage
complete for conversion |
15% |
|
Units
started into production during the month |
6,300 |
|
Units
transferred to the next department during the month |
5,800 |
|
Materials
costs added during the month |
$112,500 |
|
Conversion
costs added during the month |
$210,300 |
·
Ending work in process:
|
Units
in ending work-in-process inventory |
1,100 |
|
Percentage
complete for materials |
70% |
|
Percentage
complete for conversion |
40% |
·
Required: Calculate the equivalent units for materials (using the
weighted-average method) for the month in the first processing department.
·
Question
10
·
30 / 30
pts
·
(CO A)
The following data (in thousands of dollars) have been taken from the
accounting records of the Maroon Corporation for the just-completed year.
|
Sales |
$1,300 |
|
Raw
materials inventory, beginning |
$25 |
|
Raw
materials inventory, ending |
$30 |
|
Purchases
of raw materials |
$250 |
|
Direct
labor |
$350 |
|
Manufacturing
overhead |
$500 |
|
Administrative
expenses |
$300 |
|
Selling
expenses |
$250 |
|
Work in
process inventory, beginning |
$150 |
|
Work in
process inventory, ending |
$100 |
|
Finished
goods inventory, beginning |
$80 |
|
Finished
goods inventory, ending |
$110 |
·
Use the above data to prepare (in thousands of dollars) a schedule of Cost of
Goods Manufactured and a Schedule of Cost of Goods Sold for the year. In
addition, what is the impact on the financial statements if the ending finished
goods inventory is overstated or understated?
·
Question
11
·
25 / 25
pts
·
(CO F)
Wehr Inc. is preparing its cash budget for April. The budgeted beginning cash
balance is $26,000. Budgeted cash receipts total $98,000 and budgeted cash
disbursements total $105,000. The desired ending cash balance is $50,000. The
company can borrow up to $120,000 at any time from a local bank with interest
not due until the following month.
Required:
Prepare the company's cash budget for April in good form. Make sure to indicate
what borrowing, if any, would be needed to attain the desired ending cash
balance.
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